The question of age in deciding when to begin receiving Social Security: the benefits of retiring at 67 vs 62
Weighing the benefits of starting Social Security at 62 vs. 67: Analyzing the impact of age on retirement benefits and the optimal time to begin receiving payments.
Millions of people across the country, and around the world receive Social Security benefits. However, the amount that is received is personal to each retiree as it depends on several factors, including years worked, the salary received during the time the worker was active, and, of course, the age at which the employee decides to retire.
Some retirees opt for a lower monthly payment and begin claiming benefits before they meet their full retirement age (FRA). For most workers, that age is 67, but benefits can start being claimed at sixty-two.
At what age must you retire to get the full amount of your Social Security benefit?
According to the SSA, in 2024, the average payment for a retiree who began receiving Social Security at sixty-two is $2,710, around thirty percent lower than it would be if they had waited until they met their FRA. For those retirees who met their FRA, the maximum benefit this year is $3,822. However, if one waits until they are seventy, they could be eligible for the highest possible payment offered this year, $4,873.
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In addition to losing the thirty percent penalty on your benefits by retiring early, waiting a couple extra years could help you increase your benefit amount even further. If you work in a sector where the service is rewarded, you could increase your Social Security benefit amount by adding on a few extra years at a higher income than some of the previous income data the SSA would have used to calculate your benefits.
The COLA’s impact on benefits each year
Determining when to retire can be tricky as one is completely blind to their economic future, with Social Security and any private savings they have to help them navigate that uncertainty. The one feature of Social Security designed to support retirees in maintaining their purchasing power year after year is offering a cost-of-living adjustment (COLA). This year, 3.2 percent of COLA was applied to benefits starting in January, and the 2025 benefit adjustment will be announced in October. Already, some forecasts believe that the COLA for 2025 will come in above two percent but is expected to fall short of this year’s increase.